BOOKRACK

By Vijitha Yapa

Ever since the end of World War II, Western nations led by the US and Britain have been at the forefront of championing liberal democracy and free trade. But by 2017, their positions have undergone a radical transformation. With his calls for ‘America First’ and dumping allies like the EU, President Donald Trump is focussing more on the ground than the distant horizon.

The world is experiencing a change from a new order to an old America with its ‘Me First’ attitude. Russia’s Vladimir Putin, North Korea’s Kim Jong-un, Israel and some nations in the Middle East are among the new friends of the United States.

China is waking up to its responsibilities to the international community while President Xi Jinping has become its supreme leader for life. Meanwhile, Trump is threatening to tax every Chinese product. But unlike in the recent past in the Middle East, provoking a conflict with China will not result in any country rushing to support Uncle Sam. As for trading with the EU, Trump prefers to pursue bilateral trade with European nations.

Historian Michael Burleigh’s excellent book offers insights into where exactly we’re headed. In an interesting forensic examination, he suggests that while the world may be on the cusp of still more dramatic changes, it is possible that the risks will bring not only change but surprisingly a wholly positive transformation.

According to him, it’s far too simplistic to believe that a more self-assertive China is going to assume global leadership, which position the US seems to be vacating. Burleigh raises the question as to who would have thought that China could champion globalisation and lead the battle on climate change.

He notes that achieving hegemony in the Asia-Pacific region is China’s priority. The Asian giant is believed to be committing US$ 5 trillion to build infrastructure projects in Asia, the Middle East and Europe under the Belt and Road Initiative, to boost growth and trade.

Burleigh confesses that he’s not a futurologist and lacks the gift of prophecy. But he reminds readers that the removal of Saddam Hussein did not result in Iraq becoming a beacon of democracy and liberal economics. In fact, the battle between Iran and Saudi Arabia for regional dominance has become more intense.

He notes that the public’s war weariness was also a factor that contributed to faux isolationist Trump becoming president of the United States.

US action in Iraq and Afghanistan meant Russian suspicions about the new American dominated post-Cold War order being confirmed. It seemed as if the US was acting like a rogue state under the flag of high principles. Russia and China suspected that the Responsibility to Protect (R2P doctrine) adopted by the UN thinly concealed a Western ‘right to intervene’ against weaker states whenever it liked without major protectors.

There are new interpretations of derivatives, which Warren Buffett has defined as weapons of mass destruction.

And in describing how derivatives magnified the problems of subprime mortgages when the housing market slumped, the former Governor of the Bank of England Mervyn King said: “It was like watching two old men playing chess in the sun for a bet of US$ 10 and then realising that they are being watched by a crowd of bankers who are taking bets on the results to the tune of millions of dollars.”

Burleigh pulls no punches. He says that in the UK and France, the supermarket maxim of ‘buy our arms and get our foreign policy free’ prevails. He refers to the scandal involving the payment of UK£ 250,000 by British defence company BAE Systems to the daughter of Saudi Prince Bandar Bin Sultan to go on a luxury honeymoon. This was prior to signing the Al Yamamah arms deal worth UK£ 43 billion.

The investigation into the deal was halted by former British Prime Minister Tony Blair when the Saudis threatened to liquidate US$ 750 billion of Treasury securities and 587 billion dollars of sovereign wealth funds.

Meanwhile, China has US$ 1.3 trillion in US Treasury securities, which Trump seems to be disregarding as he threatens to tax Chinese products.

Saudi Arabia is sitting on an estimated 260 million barrels of oil. At current and projected consumption rates, the Saudis would like the price of crude to rise to US$ 320 a barrel but by long-term estimates, they may be forced to import oil by 2038!

This book is packed with interesting statistics and analyses, and is essential reading for those who wish to obtain insights into what’s happening in the Middle East, China, Russia and the US.

Burleigh helps us understand what’s going on in the world and where it is heading.